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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CONFIDENTIAL SECRETARY'S G O V E R N O R S C MINUTES O N F E R E N CE APRIL 2 7 , 2 8 , A N D 2 9 , 1931. WASHINGTON, O N O C ia ; s c a D . CG. omaninne https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FEDERAL RESERVE OF C L E V E L A N D BANK F E D E R , iy Q OFaSBME Bang vay Se! NB¥126 M M ® TES SECRE r a n s ahr v CONFIDENTIAL Mr. Wm. McC. Martin, Governor, Federal Reserve Bank o f St. Louis, St. Louis, Mo. Dear Mr. Martin: There i s enclosed for your confidential use, a copy of the Secretary's minutes of the Conference of Governors h e l d i n Washington o n April 27, 28, a n d 29, 1931. I shall appreciate i t if you will call m y atten- tion t o any errors o r omissions which should b e corrected, and trust that y o u will feel free t o suggest a n y changes which you think necessary. With kind personal regards, I am Yours sincerely, Mi foal Secretary, Governors! conference. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis INDEX T O SECRETARY'S MINUTES GOVERNORS CONFERENCE APRIL 27, 28, AND 29, 1931 Paragraph i n Secretary's Minutes Ae B e Ac. bank collection c o d e Adjusted service certificates Advertising F e R e membership Applications o f state banks a n d trust c o m ~ paniss for membership - --~« <= Bank supervision a n d relationship o f reserve banks t o bank examinations a n d supervision Change i n weekly F e R e B e statement Closed banks, U n i f o r m arrangement t o notify a l l Fe R e B's o f reopening o r succession o f Committee reports: Bankers acceptances, Subcommittees o f general committee o n Collections, Standing committee o n Insurance - - = Leased wire Pension = - - + ~ - - = - = Compensation o f officers a n d employees a f t e r d e a t h Cooperation o f investment banking houses i n character o f securities o f f e r e d f o r purchase b y Consideration o f advisability o f action t o reduce expenses o f operation o f F e Re: Banks Discount rates a n d open market purchases ~ relation t o trade, etc. EBarnings a n d expenses o f F a R e Banks Their https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Paragraph i n Secretary's Minutes Fe Re Act, Possible desirability o f amending F. R e B. statement, Change i n weekly F. R e membership, Advertising o f -=<=<-=< F. R e practice a n d procedure, I n t e r i m report o f committee t o study Final returns, Uniformity i n advices following “without returns" notices Fiscal Agency Department expense, Reconsideration o f character o f - - = Flexibility o f interest rates Gold: Desirability o f publication o f separate reserve percentages Its effect, i f any, o n present depression Government checks a n d warrants Insurance committee, R e p o r t o f - ~ - ~ - = < Interim report o f committee appointed t o study Fe R e practice a n d procedure Investment policy, S h o u l d earnings influence Leased wire committee, R e p o r t o f Loans o n adjusted service certificates Open market operations, R e p o r t o n Payment o f salary after death o f officers and employees https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Paragraph i n Secretary's Minutes Payment o f salary t o incapacitated officers and employees << ~ = = 6 w m mw Pension committee, Report of ----=--=--=-=-Progressive penalty rates ~ < - “ - § = = = = Reconsideration o f character o f Fiscal Agency GG a e e a e e e e e e e Recommendation o f Federal Advisory Council Relations w i t h foreign banks: Report - Operations Credit a n d economic conditions i n foreign countries Silver Reports o f committees - — Report o n open market operations - - - Responsibility o f F e R e Banks i n cashing Treasury warrants Securing cooperation o f investment banking houses i n character o f securities o f f e r e d for purchase - =< =< =-— Separate reserve percentages against notes and deposits Should earnings influence o u r investment policy - - - - - 4 4 - 4 44-42-5256 Standing committee o n collections, Report o f =~ = - = Subcommittee o f general committee o n bankers acceptances = https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Paragraph i n Secretary's Minutes Suggested policy o n applications o f state panks a n d t r u s t c o m p a n i e s f o r membership Treasury bills, certificates, a n d long time Treasury financing Uniform arrangement t o notify all F e R e reopening o f closed banks Uniformity i n advices o f final returns following "without returns" notices ~ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CONFIDENTIAL FG F E R Bertil 2 7 , 2 3 e e n d 2 9 , 1 9 5 4 Yashington, D . Ce. CREDIT TRANSACTIONS AND POLICIES A. D i s c o u n t r a t e s a n d open market operations. dey T h e i r relation t o volume o f trade, production, a n d commodity prices, Report o n open market operations. N e w York New York Its e f f e c t , i f any, u p o n t h e present depression. Desirability o f publication o f separate reserve percentages against notes a n d deposits. N Relations w i t h foreign banks. Report. w York e Operations. Credit a n d economic conditions i n principal foreign countries. Silver. N Desirability o f flexibility o f interest rates p a i d o n deposits a n d o f bank dividends. Treasury financing. N ve T r e a s u r y b i l l s , c e r t i f i c a t e s , e w York w York e and long time bonds. N e w York Possible desirability o f amending Federal Reserve A c t s o a s t o permit a Federal P h i l a d e l p h i a Reserve b a n k i n emergencies t o make a d vances t o member banks o n the security of assets other than presently eligible paper. Interim report o f committee o f Governors N e w York appointed at September 1930 conference P h i l a d e l p h i a to study Federal Reserve practice a n d procedure. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis He S h o u l d loans o n adjusted service certificates b e made eligible f o r pledge w i t h the Agente Minneapolis S Le S h o u l d earnings, o r lack o f them, influ-~ ence o u r investment policy. n Francisco a QPERATION A N D ADMINISTRATION N e Ae B a n k supervision a n d appropriate relationship o f reserve banks t o bank examinations a n d supervision. S a le R e c o m m e n d a t i o n o f Federal Advisory w York n Francisco Council that "There should b e impos-— P h i l a d e l p h i a ed upon t h e Federal Reserve banks the requirement t o k e e p themselves informed o f the quality o f the i n vestments a n d loans, a n d the policy of the management o f all member . banks " Earnings a n d expenses o f Federal Reserve M i n n e a p o l i s banks C h i c a g o Richmond 1. Consideration o f advisability o f ac~- K a n s a s City tion t o reduce expenses o f o p e r a C l e v e l a n d tion o f Federal Reserve banks, i n auguration o f service charges, d i s continuance o f certain f r e e services, etc., i n a n effort t o more nearly equalize expenses a n d earnings» Reconsideration o f character o f Fiscal K a n s a s City Agency Department expense, w h i c h should C l e v e l a n d be reimbursed b y the Treasury Department. De C h a n g e i n weekly Federal Reserve bank state~ F . R. Board ment. ( I t has b e e n recommended that hereafter special one-day Treasury certificates o f indebtedness b e shown separately i n the b o d y o f the weekly Federal Reserve b a n k statement against t h e cap- tion "Special Treasury Certificates." See F . R e Board's letter X-6859 o f April 13, 1931). https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Be C o m p e n s a t i o n f o r officers a n d employees o f Federal Reserve banks after d e a t h a n d dur- Fe ing periods o f incapacitation and extended iliness. ( T h e board considers i t important that s o m e definite understanding should b e arrived a t concerning t h i s matter, and, i f possible, also regarding matter o f salary payments t o officers a n d employees absent o n account o f illness o r injury n o t received i n the line o f official duty. See F e R e Board's letter X-6859 o f April 13, 1931.) Fe A d v e r t i s i n g Federal Reserve membership» New Y o r k Ge P o s s i b i l i t y o f securing cooperation o f in- Philadelphia vestment banking houses i n character o f securities o f f e r e d f o r purchase b y banks. COLLECTIONS A N D CLEARINGS A. R e p o r t o f Standing Committee o n Collections. Be D e s i r a b i l i t y o f endeavoring t o get the bank~ ers associations o f t h e different states interested i n the matter o f having t h e American Bankers Association b a n k collec- tion code adopted b y their respective State legislatures. Uniform arrangement t o notify all Federal Reserve banks a n d branches o f reopening o r succession o f banks previously closed. Uniformity i n respect t o advices o f final r e - turns following "without returns" notices« REPORTS O F COMMITTEES Insurance committeee Leased wire committees Pension committees Subcommittee o f general committee 6 n bankers acceptances e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SUPPLEMENTARY TOPICS A. Desirability o f definition b y the Treas- FeRe B o a r d ury Department o f t h e rights, duties, and responsibilities o f Federal Reserve banks i n "cashing" Government checks and warrantse: ( S e e Fe R. Board's letter dated April 27, 1931.) Suggested policy i n acting o n applications of state banks a n d trust companies f o r Fe ReBoard Membership. ( S e e Fe Re Board's letter dated April 27, 1931.) Progressive penalty ratesSe (See Fe Re Board's memorandum X-6892~-a dated April 25, 1931.) Fe R e Board https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April 27, 2 8 , a n d 29, 1 9 3 1 Washington, De: C e First Day's Session, Monday, April 27-! Morning The meeting w a s called t o order a t 10:40 a e m e PRESENT: G o v e r n o r Calkins, Chairman, a n d Governors Young, Harrison, Norris, Fancher, Seay, Black, McDougal, Martin; Geery; Bailey, a n d Talley. Deputy Governor Worthington. Governor Meyer and Messrse Miller and James o f the Federal Reserve Boarde: Mre: Strater, Secretarye VOTED t h a t t h e topics submitted b y the Federal Reserve Board b e made t h e first order o f businesses TOPIC II. O P E R A T I O N AND ADMINISTRATION De C h a n g e i n weekly Federal Reserve w a n k statements. VOTED t h a t t h e conference approves t h e suggestion contained i n the board's letter X-6859 o f April 13, 1931, t h a t special o n e d a y certificates o f indebtddness b e shown s e p a r ately i n the b o d y o f t h e weekly Federal Reserve b a n k statement against the caption "Special Treasury Certificates." https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ee o e toric i l s O P E R A T I O N A N D ADMINISTRATION Be C o m p e n s a t i o n f o r officers and employees o f Federal Reserve banks after death and during periods o f in~capacitation a n d extended illnesse It was t h e consensus o f opinion t h a t this topic embraces t w o related questions, a n d i t was VOTED t h a t e a c h question b e considered separate- First: P a y m e n t o f a sum equal t o one o r more months s a l a r y t o the widow, dependents, o r estate o f deceased officers o r employees. Careful consideration was given t o the matters referred to in the board's letter X-6859, particularly the legal questions involved, a n d also t h e desirability o f a r riving a t a definite understanding a s t o a general policy to b e followed b y each o f t h e Federal Reserve banks. After a general discussion, i n which the members o f the Federal Re~ serve Board participated, i t was VOTED t h a t i t is the sense o f the conference: Lei T h a t i n the event o f the death o f a n officer o r employee o f a Federal Reserve bank, h i s salary should b e paid up t o the next succeeding p a y day; That t h e question whether a n y further increase i n life insurance f o r o f - ficers and employees o f a Federal reserve b a n k i s desirable i s a matter for t h e determination o f t h e Board o f Directors o f that b a n k subject, i f necessary, t o t h e approval o f the Federal Reserve Board. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ee O e That this whole question inevitably raises t h e propriety o f further c o n sideration o f a pension plan, a n d that because o f the difficulties a n d delays attached t o t h e consummation of a group pension plan, t h e Federal Reserve Board should b e asked whether it would approve o f a reasonable r e tirement annuity o r insurance p l a n for individual reserve banks a l o n g lines t h a t a r e n o w considered appropriate a n d proper f o r large corporations i n this country employing large numbers o f workers. Second: After a of this question, P a y m e n t o f salary i n full o r i n part to officers o r employees incapacitated o n account o f sickness; o r otherwise. general discussion o f t h e various phases i t was t h e consensus o f opinion t h a t t h e present procedure a s set u p by the Federal Reserve Board and followed b y all o f the Federal Reserve banks was satisfactory; and i t was VOTED t h a t t h e payment o f salary i n whole o r i n part t o incapacitated officers o r employees should b e determined b y each Federal Reserve b a n k i n the light o f t h e circumstances surrounding e a c h individual case. W h e r e the ab- sence exceeds t h e regular vacation period b y thirty days, payment. o f salary during further leave o f absence should b e subject t o approval b y the Board o f Directors a n d reported monthly t o the Federal Reserve Board, i n accordance w i t h t h e poard's letter of June 14, 1928 (X-6069.) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis oe SUPPLEMENTARY TOPIC A. Desirability of defini- ( 5 ) tion b y the Treasury Department o f the rights, duties, a n d responsibili- ties o f Federal Reserve banks i n "cashing" Government checks a n d warrants. Governor Calkins r e a d a letter f r o m Governor Meyer dated A p r i l 2 7 , 1 9 3 1 , e x p l a i n i n g t h a t t h i s m a t t e r h a d b e e n t a k e n up with the board b y one o f the Federal Reserve banks, a n d that the board's counsel suggested that the entire matter b e referred by the conference t o a committee f o r study a n d report. A memo~ randum prepared b y the board's counsel was furnished t o each member o f the conference. I t was VOTED t o refer this topic t o the Standing Committee on Collections for study and report t o the Fall Conference o f Governors. SUPPLEMENTARY TOPIC B. S u g g e s t e d policy i n acting o n applications o f State banks a n d trust companies f o r member-— shipe This topic w a s also submitted i n Governor Meyer's letter o f April 27, 1931, w i t h t h e request t h a t t h e conference express i t s opinion w i t h regard t o the adoption o f t h e policy by the Federal Reserve B o a r d o f requiring that, a t the t i m e of a d m i s s i o n of a in the system, State b a n k o r t r u s t c o m p a n y t o membership i t shall b e free f r o m all known losses a n d d e - preciation s o that o n the date i t s membership becomes effect- ive, its statement will reflect a s nearly a s possible, t h e value o f its assetse I t was https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis VOTED t h a t i t i s t h e sense o f the conference that t h e policy which t h e Federal Reserve B o a r d proposes to adopt i s sound i n principle. Governors Y o u n g a n d Black voted i n the negative. TOPIC I . C R E D I T TRANSACTIONS A N D POLICIES He S h o u l d loans o n adjusted service certificates b e made eligible f o r pledge with t h e Agente VOTED t h a t notes representing loans o n adjusted service certificates s h o u l d n o t b e made eligible f o r pledge with t h e Federal Reserve Agente TOLL L s R E P O R T S O F COMMITTEES Insurance committecs. Leased wire committee. Pension committee. Subcommittee o f general committee o n bankers acceptances. III. C O L L E C T I O N S A N D CLEARINGS fie R e p o r t o f Standing Committee o n Collections. committee reports w e r e read, a n d i t was that t h e y b e accepted a n d filed. Lis O P E R A T I O N A N D ADMINISTRATION Ge P o s s i b i l i t y o f securing c o - operation o f investment banking houses i n character o f securities offered for purchase b y banks. After a general discussion, i t was VOTED t h a t this topic b e passed without action. At 1:15 p e m e t h e conference adjourned t o reconvene at 2:15 p e M e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis First Day's Session, Monday, A p r i l 27. Afternoon The meeting w a s called t o order a t 2:30 p e m e Same attendance a s a t the morning session, e x c e p t Members o f t h e Federal R e s e r v e Board. TOPIC I v C R E D I T TRANSACTIONS A N D POLICIES Ae D i s c o u n t rates a n d open Mmarket operations. Le T h e i r relation t o volume of trade, production, and commodity prices. There followed a general discussion o f the Feder~ al reserve discount r a t e a n d t h e bill rates, a n d t h e effect of recent bill reductions n o t only o n the total volume and price o f credit, b u t o n the foreign exchanges a n d the g o l d movement. C o n s i d e r a t i o n was also given t o the probable effect o f any further reductions i n bill and discount rates o n the rates o f interest paid o n deposits b y banks» I t was thought that reductions i n interest rates o n all classes o f deposits might exert some pressure i n the direction o f compelling surplus credit accumulating a s bank deposits t o seek employment i n other fields. At the invitation o f the conference, Governor Meyer entered the meeting a t 4:30 p e m e and joined i n the discussion. At 5:50 p e m e the conference adjourned t o reconvene a t 10:00 a. me: o n Tuesday, April 28. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Second Day's Session, Tuesday, j p r i l 28. Morning The meeting w a s called t o order a t 10:30 a . m . Same attendance a s a t t h e preceding session. TOPIC I . C R E D I T TRANSACTIONS A N D POLICIES ( 1 1 ) Ae D i s c o u n t rates a n d o p e n m a r — ket operations. Qe R e p o r t o n open market operations. Governor H a r r i s o n f u r n i s h e d e a c h o f t h e G o v e r n o r s with a report t o b e presented b y h i m t o the O p e n Market Policy Conference. T h i s report reviewed o p e n market opera- tions during the past year in connection with business, banking, a n d credit transactions generally, a n d emphasized t h e i m portance o f a n affirmative s y s t e m policy i n the light o f those conditions. ( S e e a l s o Governor Harrison's report s e n t t o each Governor with his letter of May 7, 1931). TOPIC I. C R E D I T TRANSACTIONS AND POLICIES ( 1 2 ) Bee G o l d . e « I t s effect, i f any, u p o n the p r e s e n t d e p r e s s i o n . Governor Harrison discussed t h e effect o f recent gold imports a n d t h e probable effect o f impending a n d continued g o l d i m p o r t s f r o m B u r o p e a n c o u n t r i e s . H e stressed the importance o f some effort b e i n g made t o retard t h e f l o w of g o l d i n t o t h i s c o u n t r y , o r a t least t o make useful g o l d https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis as which i s imported rather t h a n t o have a l l imports o f gold nullified b y pro tanto reductions i n Federal R e ~ serve crédit, a s has b e e n t h e case f o r t h e past fifteen m o n t h s . 7oric I , C R E D I T TRANSACTIONS A N D POLICIES Desirability ( 1 3 ) o f publi- cation o f s e p a r a t e reserve p e r c e n t a g e s against n o t e s a n d deposits. There w a s a general discussion o f the present policy and practice of publishing only the reserve percentages against combined notes a n d deposits, a n d t h e pos- sible advantage o f setting aside a definite, although per-~ haps arbitrary, amount o f gold as reserve against Federal Reserve notes and the balance o f the gold held b y the Federal Reserve banks a s a reserve against deposits with perhaps a minimum percentage, s o that t h e ratio o f gold re~- serves t o deposits m i g h t serve a s a better indicator o f the volume and velocity o f bank credit i n use i n the country. N o action w a s taken. TOPIC I. CREDIT TRANSACTIONS AND POLICIES ( 1 4 ) Be T r e a s u r y financing. i. T r e a s u r y bills, certificates, a n d long time bonds + Honorable Ogden L. Mills, Undersecretary o f the Treasury; e n t e r e d t h e conference a t 11:10 a e me, a n d dis- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cussed some o f the problems confronting t h e Treasury in connection w i t h current a n d long time financing. TOF aC L s C R E D I T TRANSACTIONS A N D POLICIES ( 1 5 ) D. D e s i r a b i l i t y o f flexibility of interest rates p a i d o n deposits a n d o f bank divi- dends« The general tendency o n the p a r t o f banks i n some communities t o reduce t h e rate o f interest p a i d o n deposits w a s commended a s good banking policy a t this time. It was t h e sense o f t h e conference t h a t where t h e advice o f officers o f t h e Federal Reserve S y s t e m was solicited, it would b e desirable a n d helpful t o point o u t t o inquiring member banks specific instances where t h e reduction o f i n terest rates o n deposits h a s proven beneficial. While t h e r e d u c t i o n i n the rates o f dividends paid b y member banks w o u l d also b e very helpful i n many instances, i t was felt that this i s a matter that should be l e f t w i t h t h e d i r e c t o r s o f t h e member banks. Toric i . C R E D I T TRANSACTIONS A N D POLICIES Ce R e l a t i o n s w i t h foreign banks» le R e p o r t . ae O p e r a t i o n s . Be C r e d i t a n d economic c o n ditions i n principal foreign countries. 4 Silver. Governor Harrison reported informally o n the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis various matters relating t o operations w i t h foreign central banks, commenting particularly o n the depressed economic conditions abroad:as reflected i n the unfavor- able trend o f imports a n d exports i n those countries where statistics w e r e available,and t h e situation w i t h respect t o silver. TOrLG i . C R E D I T TRANSACTIONS A N D POLICIES Fe P o s s i b l e desirability o f amending Federal Reserve Act s o a s t o permit a Federal Reserve b a n k i n emergencies t o make a d ~ vances t o member banks o n the security o f assets other t h a n presently eligible p a p e r . There was a general discussion i n which i t de~ veloped that some broadening of eligibility requirements as a n emergency measure under proper restrictions a n d regu~ lations might b e desirable.» A c t i o n w a s deferred until t h e session o n Wednesday morning. At 1:15 p . m . the conference adjourned t o recon- vene a t 9:30 a.» me Wednesday, April 29. Third Day's Session, Wednesday, A p r i l 29.6 Morning The meeting was called t o order a t 9:45 a. m. with t h e same attendance a s a t the preceding session. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TOPIC I s C R E D I T TRANSACTIONS A N D POLICIES ( 1 8 ) F. Possible desirability o f amending Federal Reserve Act s o a s t o permit a Federal Reserve b a n k i n emergencies t o make a d vances t o member banks o n the security o f assets o t h e r than presentiy cligible paper. The discussion begun a t t h e previous s e s s i o n w a s resumed, a n d i t was VOTED t h a t i t i s the sense o f t h e conference t h a t it would b e desirable t o amend Section 1 3 o f the Federal R e serve A c t s o a s t o make i t possible f o r Federal Reserve banks to make advances t o their member banks o n their promissory notes when secured either b y collateral now defined a s eligible collateral u n d e r t h e terms o f Section 13, o r when secured b y the deposit o r pledge o f debentures o f Federal Interme~- diate Credit Banks w h i c h have a months, maturity o f not more t h a n s i x o r i n the c a s e o f a n emergency w h e n secured b y other assets subject t o the discretion o f the Board o f Directors o f the Federal Reserve b a n k a n d subject t o such restrictions, limitations, a n d regulations a s M a y b e imposed b y the Federal Reserve Boarde I t was t h e understanding o f t h e conference that when s u c h notes o f member banks a r e secured b y notes, drafts; bills o f exchange, o r bankers’ acceptances, s u c h a s are n o w eligible f o r rediscount o r purchase b y Federal R e serve banks, s u c h promissory notes should have a maturity o f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis not more t h a n 9 0 days sight, exclusive o f days o f grace, and that when secured i n whole o r i n part b y any other collateral t h e y should have a maturity o f n o t more t h a n 15 days sight, exclusive o f days o f grace. I t is the sense o f the conference t h a t i f t h e Federal Reserve B o a r d approves t h e principles involved i n this resolution, it should b e asked t o consider what would b e a n appropriate time t o request t h e necessary legislation. Governors Calkins, Martin, a n d Talley voted i n the negative. 20PIG i. C R E D I T TRANSACTIONS AND POLICIES Ge I n t e r i m report o f committee of Governors appointed a t September 1930 conference to s t u d y F e d e r a l R e s e r v e practice a n d procedure. Governor Harrison, C h a i r m a n o f this committee, reported t h a t i t had b e e n impracticable f o r t h e committee to meet, a n d that consequently i t was unable t o submit a report a t this time. toric J e C R E D I T TRANSACTIONS A N D POLICIES Le S h o u l d earnings,or l a c k o f them, influence o u r investment policy. After a short d i s c u s s i o n , i t was VOTED t h a t t h e investment policy o f the Federal Reserve banks should n o t b e influenced b y earnings. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TOPTG 1 h ¢ O P E R A T I O N A N D ADMINISTRATION ( 2 1 ) Lie B a n k s u p e r v i s i o n a n d a p p r o ~ priate relationship o f reserve banks t o bank examinations a n d s u p e r v i s i o n . Le R e c o m m e n d a t i o n o f Federal Advisory Council t h a t "There should b e impos— ed upon t h e Federal R e serve banks t h e regquire-— ment t o keep themselves informed o f t h e quality of the investments a n d loans, a n d t h e policy o f the management o f all men~ ber banks." The question o f bank supervision a n d bank examina~ tions, a n d the recommendation o f t h e Federal Advisory Council, were considered b y the conference t o b e matters requiring careful consideration a n d study, a n d after a short discussion, it was VOTED t h a t t h e whole question b e referred t o the conference's committee o n Federal Reserve practice a n d procedure f o r study a n d report t o the next Conference o f Governors. (The committee consists o f Governor Harrison, Chairman, a n d Governors Norris, Young, McDougal, and Calkins.) TurLo L e s O P E R A T I O N A N D ADMINIS TRATION Bei B a r n i n g s a n d expenses o f Federal Reserve banks. Le C o n s i d e r a t i o n o f advisability o f action to r e d u c e e x p e n s e s of operation o f Federal Reserve banks, i n a u guration o f service https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis charges, discontinuance of certain free services, etCe, i n a n effort to more nearly equalize expenses a n d carnings. It was t h e consensus o f opinion t h a t t h e earn~ ings o f Federal Reserve banks, a s well a s t h e advisability of action t o reduce expenses o f operation, w e r e questions which could more intelligently b e considered after some months o f further experience, a n d i t was VOTED t h a t consideration b e deferred until t h e Fall meeting o f the conference. TOPIC If. O P E R A T I O N A N D ADMINISTRATION Ce. R e c o n s i d e r a t i o n o f character o f Fiscal Agency Department expenses w h i c h should b e reimbursed b y the Treasury Department. After a brief discussion, i t was t h e sense o f the conference t h a t this topic w a s i n the same category a s b e de~ the preceding one, a n d that consideration should a l s o ferred u n t i l t h e F a l l C o n f e r e n c e o f Governorse TOPIC II. O P B R A T I O N AND ADMINISTRATION ( 2 4 Fe: f d v e r t i s i n g Federal Reserve membershipe Governors Harrison and Norris informed the conference o f their experience w i t h a corporation organized f o r t h e membership purpose o f advertising t h e benefits derived f r o m ) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OS o e in the system, t h e expenses o f t h e corporation t o b e derived e t least i n part b y voluntary contributions from member banks. T h e corporation h a s attempted t o obtain t h e approval o r endorsement o f t h e Federal R e serve Banks o f N e w York a n d Philadelphia. formal action, Without i t was agreed that t h e Federal Reserve panks c o u l d n o t with propriety give approval o r support t o a n y agency o r organization soliciting subscriptions f r o m banks a n d others f o r the purpose o f explain- ing o r advertising the benefits derived from membership in the systeme TOPlC Tile C O L L E C T I O N S A N D CLEARINGS Bei D e s i r a b i l i t y o f endeavoring t o get the bankers associations o f the different states interested i n the matter o f having t h e American Bank~ ers Association b a n k collection c o d e adopted b y their respective State legislatures. Ge U n i f o r m arrangement t o notify all Federal Reserve banks and branches o f reopening or succession o f banks p r e viously c l o s e d e Dei_Uniformity i n respect t o _advices o f final returns f o l - lowing "without returns" noticese' It w a s VOTED t o refer these topics t o t h e Standing https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Committee o n Collections f o r study a n d report t o t h e next C o n f e r e n c e o f Governors. SUPPLEMENTARY TOPIC C. P r o g r e s s i v e Penalty Rates. ( 2 6 ) Governor Calkins read a memorandum from Mr. Smead, Chief o f t h e Division o f Bank Operations, t o Gov- ernor Meyer, subject: " P r o g r e s s i v e penalty rates o n deficiencies o f member banks". I t was VOTED t h a t t h e Federal Reserve B o a r d b e request-— ed to forward a copy o f Mr. Smead's memorandum, a s a matter of information, t o each Federal Reserve b a n k which n o w ap- plies p r o g r e s s i v e p e n a l t y r a t e s f o r c o n t i n u e d d e f i c i e n c i e s in reserves. At 1:15 p. m. the conference adjourned. H. F. STRATER Secretarye https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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